Australia is preparing to place Coles and Woolworths under tougher pricing scrutiny from July 1, 2026, as new supermarket laws target excessive grocery prices.
The rules will give the Australian Competition and Consumer Commission greater power to examine whether prices at the country’s biggest supermarket chains are significantly above supply costs plus a reasonable margin.
Australia Moves First With Supermarket Pricing Laws
The new framework is being described as a world-first move. From July 1, Australia will become the first country to introduce a specific excessive-pricing prohibition for very large supermarket retailers.
The policy comes as grocery bills remain a major cost-of-living pressure for Australian households. Coles and Woolworths have faced heavy public and political attention over supermarket prices, promotions and margins.
However, the move is also controversial because earlier reviews found no clear evidence of price gouging by the two supermarket chains. That means the law is being introduced as a preventive watchdog power, not as a response to a proven breach.
Why Coles and Woolworths Are Covered
The rules apply to grocery retailers classified as “very large retailers.” In practice, that means supermarket businesses with annual revenue above A$30 billion.
Only Woolworths and Coles currently meet that threshold in Australia. Their scale, store networks and national influence put them at the centre of the grocery-pricing debate.
Other grocery operators are outside the scope. Aldi’s 2025 turnover was about A$13.3 billion, while Metcash, which supplies IGA stores, reported revenue of about A$10.5 billion. Both sit below the A$30 billion threshold.
That difference means Australia’s two biggest supermarket chains will face a level of pricing oversight that does not currently apply to smaller competitors. It also comes as discount retailers continue using promotions such as Aldi’s latest Special Buys offers to attract value-focused shoppers.
How the ACCC Will Judge Excessive Prices
The law does not create a standard grocery price cap. There is no fixed percentage mark-up, dollar limit or automatic shelf-price test.
Instead, the ACCC will consider whether a product has been sold at a price that is significantly excessive compared with the retailer’s supply cost, plus a reasonable margin.
That gives the regulator flexibility, but it also creates room for debate. A shelf price may look high to shoppers, while supermarkets may argue it reflects higher energy, fuel, insurance, production, freight or distribution costs.
The ACCC will examine pricing information, margins, sales revenue and other relevant circumstances before deciding whether a product needs closer investigation.
Consumer Complaints Will Help Shape Enforcement
The ACCC has said it will focus on products where excessive pricing is likely to cause the most harm to consumers.
Reports from shoppers and suppliers will help guide that work. If consumers believe a grocery item has been priced unfairly, or suppliers raise concerns about supermarket pricing behaviour, those reports may influence which products are reviewed first.
The regulator is also expected to use information obtained from supermarkets, including prices, margins and sales revenue. Products selected for closer scrutiny may be made public, giving shoppers more visibility into how the law is enforced.
Will Grocery Prices Fall After July 1?
Lower supermarket bills are not guaranteed when the rules begin.
The law gives the ACCC a new way to monitor and challenge excessive pricing, but it does not force Coles or Woolworths to cut prices across the board from July 1.
Any action would depend on evidence that a specific grocery product has been priced excessively under the new test.
For households, the immediate effect may be more scrutiny rather than instant savings. Over time, the threat of regulatory attention could make the big supermarkets more cautious when lifting prices or widening margins on essential products.
Coles and Woolworths Push Back
Coles has argued that higher grocery prices are being driven by rising costs, not price gouging. The company says it earns about A$2.43 in profit for every A$100 spent in its stores.
Coles has pointed to higher energy, fuel, insurance, production, freight and distribution costs as major reasons grocery prices have increased. It has also warned that extra regulation could add cost pressures rather than reduce them.
Woolworths has also raised concerns, saying no other country has adopted this approach. The company argues the rules do not clearly define what counts as an excessive price, making compliance difficult across thousands of products.
Woolworths has also said the law applies to two Australian-owned supermarket groups while excluding global retailers with larger worldwide scale and growing market share in Australia.
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What Happens Next
From July 1, the ACCC will begin monitoring Coles and Woolworths pricing information while assessing complaints from consumers and suppliers.
The rules do not mean every high grocery price is unlawful. They create a specific tool for the watchdog to challenge prices it believes are significantly out of line with supply costs and reasonable margins.
For shoppers, the biggest benefit may be transparency. For Coles and Woolworths, the biggest risk is tighter scrutiny of pricing decisions, margins and future price rises.
Official guidance on the new framework is available from the Australian Competition and Consumer Commission.
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